Facebook Founder Saverin Would Be Banished From U.S. Forever in Schumer Ex-Pat Tax Bill
Recently Facebook co-founder Eduardo Saverin renounced his U.S. citizenship in a bid to prevent the mass theft of his capital gains from the IPO of Facebook. Saverin decided he would rather live in Singapore than fund the U.S. government with money that is taken from him by force.
Saverin's move did not sit well with a few of the kleptocrats in Washington, who view Saverin's money as their own. In response to Saverin's expatriation, Senators Charles Schumer (D-N.Y.), and Bob Casey (D-Pa.) have proposed a bill that would bar expats from ever returning to the U.S. again. Of course, the bill would also require that expats pony up taxes on their income even if they do renounce their citizenship.
ABC News reports:
The senators will call Saverin’s move an “outrage” and will outline their plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship.The plan would bar individuals like Saverin from ever reentering the United States again.
Because freedom isn't free; therefore you must pay.
Now imagine if you are a high-rolling international businessman with millions, or perhaps even billions, at your disposal. Is it any real problem for you to pick up your assets and move out of the country? Clearly it's a thousand times easier for a millionaire to flee the country than it is for the average working stiff. So, what would be your reaction to a bill being proposed such as this? Might it be to get the hell out of dodge now before the thing actually passes?
Historically, the act of capital and expatriation controls by a state is the domain of failing banana republics and fascist/communist states. Failing states enact laws and erect walls to keep people trapped within them in order to prevent a phenomena called "brain drain." Brain drain occurs when highly skilled people realize that they can have a better quality of life in a foreign state. Since highly skilled people usually have a lot of resources at their disposal which makes it easy for them to move, and because they are very desirable for other states to have as citizens, a situation arises where the skilled workforce of a failing state flees, leaving behind the low skilled labor force to fend for themselves.
This makes Schumer's bill all the more ridiculous. Schumer is telegraphing the state's intention to engage in capital/expatriation controls, but rather than preventing people from fleeing through the use of walls/mine fields/barbed wire, Schumer is threatening them with a permanent ban from ever returning.
If Schumer thinks his bill is going to keep high-skilled people from fleeing the country, he is grossly mistaken. In fact, it will have the exact opposite effect. While fewer than 2,000 people renounced their U.S. citizenship last year, we will probably see those numbers increase given the threats being put forth by Schumer. The handwriting is on the wall. It is only a matter of time before they move from a ban on returns to a ban on leaving.
I personally know at least one highly skilled friend of mine who has fled the country, and I know of several very well-to-do businessmen who have already fled as well. Saverin isn't the first, and he most certainly will not be the last. Soon the U.S. government will finally get serious about border controls, but they aren't going to be concerning themselves with people trying to get in. Indeed, more people are fleeing to Mexico than are trying to get in right now!
As the failing U.S. state increases its taxes and capital controls, more and more highly skilled people are going to seek better opportunities, along with more freedom, abroad. And just like the failed Soviet Union and East Germany, the state will take drastic steps to prevent that from happening.